Archive

A letter from House Ways and Means Chairman Paul Ryan (R-WI) demands an explanation from the Treasury Department on why it allowed $3 billion in payments to ObamaCare insurance companies that Congress never approved.

In a well-documented piece, Philip Klein gives a disturbing summary of the Obama administration deliberately refusing to follow the law.

“At issue are payments to insurers known as cost-sharing subsidies,” writes Klein. “These payments come about because President Obama’s healthcare law forces insurers to limit out-of-pocket costs for certain low income individuals by capping consumer expenses, such as deductibles and co-payments, in insurance plans. In exchange for capping these charges, insurers are supposed to receive compensation.”

Here’s the rub.

“What’s tricky is that Congress never authorized any money to make such payments to insurers in its annual appropriations, but the Department of Health and Human Services, with the cooperation of the U.S. Treasury, made them anyway,” says Klein.

As proof, Klein cites a $4 billion funding request for the cost-sharing subsidies program in 2014 that was not fulfilled by Congress. It’s now 2015, the bills are coming due, and the Obama administration effectively said, “Never mind.”

Whether the domain is immigration or ObamaCare, the default setting for this administration seems to be that if it can’t get what it wants the legal way, it’s just as good to go around the law.

“The Obama administration says it sent about 800,000 HealthCare.gov customers the wrong tax information, and officials are asking those consumers to delay filing their 2014 taxes,” reports CNBC.

The massive blunder comes on the heels of a similar admission by California officials that the state sent out approximately 100,000 error-laden tax forms to residents using the state’s ObamaCare exchange, Covered California.

No timeline was apparent on when revised forms would be sent out, or whether early tax filers would be penalized by the Internal Revenue Service for submitting unknowingly false information.

Another item in the CNBC report may foreshadow the next move. Due to concerns that some people will be angered for being penalized for not buying insurance to comply with ObamaCare’s coverage mandate, the Obama administration is creating another sign-up extension.

Perhaps the IRS will get similar instructions from on high and bump back the filing deadline.

If so, expect to hear the millions of non-ObamaCare customers clamor, “Me too!”

“About 100,000 or 12 percent of the forms generated by Covered California have inaccuracies,” says the report. The forms are needed by California ObamaCare users to claim tax refunds and verify subsidy amounts with the IRS.

A spokesperson for Covered California said the inaccuracies are due in large part to discrepancies between the state’s records and what the insurance companies have. Despite this, the exchange sent out the forms anyway to beat the February 2 deadline.

Corrected forms are scheduled to go out later this month, but it’s unclear whether all of the 100,000 or so recipients of the inaccurate forms know they are bad. If not, they could be submitting false information to the IRS, an issue that could cause considerable problems down the road.

Once upon a time when Rep. Nancy Pelosi (D-CA) was Speaker of the House, Democrats in Congress made a lot of noise about PAYGO, the fiscal policy that essentially requires new spending to be paid for with spending cuts, tax increases, or some combination of the two.

But now that ObamaCare’s IRS-imposed penalties are coming due, those same Democrats are singing a different tune.

“Three senior House members told the Associated Press that they plan to strongly urge the administration to grant a special sign-up opportunity for uninsured taxpayers who will be facing fines under the law for the first time this year,” the AP reports.

Interestingly, the three House members – Michigan’s Sander Levin, Washington’s Jim McDermott and Texas’ Lloyd Dogget – “[a]ll worked to help steer Obama’s law through rancorous congressional debates from 2009-2010.”

And now that the price of non-compliance with ObamaCare’s tax-raising mandates is becoming obvious, all three want to avoid a predictable constituent backlash.

“More than one-third of all House members have signed onto legislation that would repeal ObamaCare’s tax on insurance companies, which even some Democrats agree is leading to high insurance costs for millions of American families,” reports The Blaze.

People familiar with the logic of doing business understand that private firms don’t pay taxes, people do. So when ObamaCare imposes a tax on health insurance providers, that amount gets passed on to consumers as higher premiums.

With ObamaCare’s second enrollment cycle about to end, many people are experiencing this economic rule up-close-and-personal.

“I hear every day from individuals, families, and businesses in Arizona about the cost of health care,” Rep. Kyrsten Sinema (D-AZ) is quoted as saying. “This common sense fix [i.e. repeal] will help lower out of pocket costs for hardworking Arizonans. By working together, we can provide relief for individuals, families, and employers while increasing access to quality affordable health care.”

That’s highly unlikely because ObamaCare’s regulations increase the cost of providing health care, and its complex web of subsidies is designed to hide some of that increase. Repealing a source for subsidies without also repealing the regulations that make them necessary leaves the elevated cost without a means to pay for it.

Still, it’s good to see at least some Democrats in Congress supporting the repeal of at least some part of ObamaCare. Remove enough supports, and eventually the whole architecture crumbles.

If so, top administrators at Health and Human Services, the Internal Revenue Service and Treasury aren’t sharing.

That lack of transparency – and the havoc it could wreck on millions of mandatory ObamaCare users – angers a group of powerful Senate Republicans.

“I want to make certain that the government has notified people who have signed up through the HHS insurance exchange – including the thousands of Georgians who were forced to enroll after ObamaCare cancelled their health plans – of the potential consequences of the Court ruling against the government, especially given the fact that the cost of the program could be significantly increased,” Senator Johnny Isakson (R-GA) said in a statement.

“The Obama administration needs to be forthcoming about its backup plans so my constituents can make their own backup plans.”

Isakson and other Republicans serving on the Senate Finance Committee sent a strongly worded letter to several government agencies demanding details of any contingency plans. In it they charge HHS Secretary Sylvia Mathews Burwell, Treasury Secretary Jacob Lew, and IRS Commissioner John Koskinen with “lack of candor” and “evad[ing] the issue when it was raised at hearings before the Committee this week.”

Then along came King v. Burwell, one of the cases challenging the legality of federal subsidies necessary to make ObamaCare plans affordable. (Necessary, but not, according to ObamaCare’s text, permitted in states that rely on the federal government’s insurance portal.)

The Supreme Court is set to hear oral arguments this spring, and many entities have submitted amicus or friend-of-the-court briefs to persuade the justices their way.

“Among those filing amicus briefs defending health reform are HCA, the American Hospital Association, America’s Health Insurance Plans, the National Alliance of State Health Co-ops, the Catholic Health Association of the United States, the American Cancer Society, and the National Association of Community Health Centers,” reports Bloomberg Business. “The insurance and medical industries share the administration’s goal of seeing millions more people covered because that translates into millions more customers seeking the services of carriers, hospitals, and doctors.”

If given a choice, many established businesses would prefer a guaranteed arrangement with the government rather than rely exclusively on the volatility of the market. It’s easy to see why. But discomfort to the health insurance industry should not trump the rule of law. If the IRS can rewrite ObamaCare to make money available where it has been prohibited, then perhaps another agency hence can also decide to cancel spending that is legally required.

No businessman wants to be on the wrong side of a one-way contract. Yet that’s precisely what will happen if the federal bureaucracy gets to change the terms of ObamaCare whenever it sees fit.

Even though Jonathan Gruber did his best to apologize for his incredibly damaging – and seemingly accurate – remarks about how and why ObamaCare was drafted, there was no place to hide from the bipartisan rebuke he received today from the House Committee on Government Oversight and Reform.

Gruber is the now infamous MIT professor and erstwhile “architect” of Democrats’ signature health reform law that called American voters “stupid” for not understanding basic economics and the deceptive policies embedded in ObamaCare.

Gruber’s comments have incensed Republicans, but they’ve also infuriated Democrats. Of all the anger directed at Gruber today, perhaps none was more forceful than that erupting from Rep. Elijah Cummings of Maryland, the ranking Democrat on the committee.

“As far as I can tell, we are here today to beat up on Jonathan Gruber for stupid – I mean absolutely stupid – comments he made over the last few years,” Cummings said. “Let me be clear, I am extremely frustrated with Dr. Gruber’s statements” because “They were irresponsibly, incredibly disrespectful, and did not reflect reality. And they were indeed insulting.”

We’ll see if any of this theater persuades the Supreme Court. Next spring the justices consider whether a section of ObamaCare should be interpreted, as written, to deny subsidies to citizens in 37 states that use the federal health insurance exchange. It’s an interpretation that Democrats oppose, but Gruber in at least one viral video adamantly confirms.

It’s been said that a political gaffe occurs when someone says the truth in public. Regarding ObamaCare’s deceptive elements, that may be Jonathan Gruber’s greatest offense.

On Tuesday this week Jonathan Gruber, the MIT economist and ObamaCare architect made infamous by a series of viral videos confirming suspicions of deceptive lawmaking, will appear before the House Government Oversight and Reform Committee.

The biggest issue will be whether Issa and his fellow Republicans can get Gruber to confirm his previous statement that ObamaCare only grants insurance subsidies to people in states that operate their own health exchange. That’s the central issue in the case going before the Supreme Court next spring, and if the justices accept it, much of ObamaCare could be gutted.

Liberals are already trying to get ahead of any Gruber confessions under oath that could undermine their landmark domestic policy.

In a long-read piece at Politico, a former Democratic staffer tries to minimize the impact of Gruber’s comments by first saying he wasn’t involved in the policymaking process. That’s a fair point.

But then the staffer seems to completely confirm Gruber’s main argument – that the disputed statutory language was deliberately concocted to confuse people who weren’t in on the backroom political calculations.

The Politico reporter sums up the staffer’s argument this way: “The point of having the ‘Balkanized’ approach – state health exchanges plus a federal one for states that didn’t build their own – was to appeal to centrist senators, he said, since most liberal Democrats would have been happy just to have a federal one.”

As the staffer explains it, “No one was willing to fall on their swords to make sure states ran their own exchanges.”

In other words, the text in the law that limits the flow of subsidies to state exchanges is nothing more than an Orwellian wordplay. It doesn’t mean what it says. Rather, it’s designed to give ‘centrist’ senators political cover for voting to do the exact opposite – give subsidies to everyone.

Confused? Gruber isn’t.

This new rationale sounds an awful lot like the “tortured” drafting of ObamaCare that takes advantage of the “stupidity of the American voter” that Gruber’s been saying for years.

Kudos for being honest. Now let’s see if he will remain so under oath.

With its surprising decision to hear oral argument on an ObamaCare subsidy challenge next spring, the Supreme Court of the United States is causing a flurry of activity as some states try to shore up their status ahead of a potentially costly decision.

“The consulting firm Avalere Health estimates that nearly 5 million people would see their premiums spike 76 percent, on average, if the Supreme Court strikes down subsidies in states that don’t operate their own exchanges,” reports Governing. “That estimate assumes a greater number of exchanges are considered federal, not state-based, but the question of what exactly constitutes a ‘state-based’ health exchange is murky.”

How murky?

“States have the option of running their own exchange completely (a state-based exchange), managing aspects of plan design or consumer outreach (a partnership exchange) or leaving everything to the federal government (a federally facilitated exchange),” according to the website.

Predictably, the federal Department of Health and Human Services isn’t divulging its exact criteria for categorizing an exchange, a stance that leaves states without a clear picture of how to prepare for a possible elimination of subsidies to residents.

Some states, like Nevada and Oregon that switched to Healthcare.gov – the federal website – are still considered to have state-based exchanges because they retain control over functions like plan approval, data collection and quality reporting. Others, like Utah and Mississippi, also fall into the state-based category because they host small business exchanges (but not individual exchanges).

So, the bottom line appears to be this: If the Supreme Court axes ObamaCare subsidies per the law’s text and intent, there’s a good chance President Barack Obama’s political appointees will engage in verbal gymnastics to find ways to define “state-based exchanges” in whatever manner best suits them.

No matter. Getting something fundamentally better than ObamaCare isn’t the Supreme Court’s job anyway. Best to pocket the subsidy win if it comes and work toward a policy consensus among the political branches that delivers real reform.

Fifty-six percent of Americans disapprove of ObamaCare, the highest number disapproving of the controversial health care law since Gallup began asking the question.

Approval of ObamaCare peaked just before the 2012 presidential election, but has cratered since then.

The culprit is reality.

The beginning of ObamaCare’s nosedive in popularity “occurred in early November 2013”, according to Gallup’s analysis, “shortly after millions of Americans received notices that their current policies were being canceled, which was at odds with President Barack Obama’s pledge that those who liked their plans could keep them. The president later said, by way of clarification, that Americans could keep their plans if those plans didn’t change after [ObamaCare] was passed.”

In other words, the law has continued to grow less popular with each new revelation that it was sold on a pack of lies.

Though completely repealing the entire law seems unlikely because the new Republican Senate majority is less than the number needed to overcome a certain Obama veto, the increasing levels of voter disapproval could convince some Senate Democrats to join Republicans in dismantling large parts.

Unless, that is, they want to risk involuntary retirement when their next election arrives.

In order to lay the groundwork for an ObamaCare alternative that covers as many or more people than the current law, and costs less, Republicans in Congress could unite behind a framework proposed by conservative health experts James Capretta and Yuval Levin. Similar ideas have been endorsed by Senator Orrin Hatch (R-UT), the incoming-chairman of the Senate Finance Committee, and Rep. Paul Ryan (R-WI), the likely next chairman of the House Ways and Means Committee.

If the Supreme Court does strike down the subsidies, President Barack Obama won’t have much leverage since, “Much of ObamaCare would have just self-destructed due to its own design flaws and lack of public support, and Republicans would be offering a way to advance the law’s stated goal of assuring coverage – if not in the highly prescriptive and centralized manner the White House prefers”, writes Ramesh Ponnuru. “Democrats’ favored lines of attack on Republicans over health care – that they have no alternative, that they would take people off the insurance rolls – would have been neutralized.”

Too bad the incoming Republican majority in Congress probably can’t repeal ObamaCare’s individual mandate before next April, because it looks like millions of middle-income Americans will see their tax refund cut by one-third.

“The financial penalty for skipping out on health insurance coverage [i.e. not complying with the individual mandate] will more than triple to $325 per person in 2015, or 2 percent of income, depending on whichever is higher,” reports CBS News. “Children will be fined at half the adult rate, or $162.50 for those under 18 years old.”

“Based on the flat-rate method, the maximum dollar amount an uninsured family could be fined is $975,” says the news outlet.

To put this into perspective, the average annual American tax refund is about $3,000, meaning that a $975 IRS penalty would reduce the value by one-third.

This is likely to hit middle-income Americans particularly hard since many may be earning too much in wages or salary to qualify for an ObamaCare subsidy. The Catch-22 facing these families is cutting back on other spending to pay high monthly premiums, or foregoing insurance and waiting to see how much the IRS will confiscate. Either way, the predicament facing millions of middle-income Americans is likely to make them even more hostile toward a law billed as the “Affordable Care Act.”

On Monday, the Obama administration threw out a Congressional Budget Office (CBO) estimate that ObamaCare would have 13 million enrollees by February 15, 2015. It also discarded a CBO forecast that the controversial health law would have 25 million enrollees by 2017.

Instead, the federal department of Health and Human Services (HHS) said a more likely scenario would be between 9 and 9.9 million by mid-February – a reduction of 30% from CBO’s calculations. As for 2017 totals, HHS will not commit to any numbers.

“The reduced projection is due to recent data showing ‘mixed evidence’ about how quickly – and how dramatically – people will shift from employer-sponsored health insurance and non-ObamaCare plans into insurance plans sold on government-run marketplaces such as HealthCare.gov,” reports CNBC.

What HHS isn’t saying is how the Obama administration playing politics with statutorily mandated deadlines has fouled up ObamaCare’s implementation timetable. Originally, CBO and others could reasonably anticipate quick and dramatic shifts onto ObamaCare plans because the employer mandate made it financially smart to dump workers onto the exchanges and pay a relatively small fine.

But fearing a voter backlash at such a quick and dramatic change, the Obama administration has delayed implementing the employer mandate at least three times. It now isn’t scheduled to go into effect until 2017 – the first year after President Barack Obama is out of office.

According to an HHS report, “there is considerable uncertainty that a large shift will occur over the new two years”, which, “contributes to an analysis that the ramp up to 25 million will take more than three years.”

In other words, thanks to politically motivated regulators, no one knows when, or if, ObamaCare will meet its most important benchmark – sustainable enrollment.

The case, King v. Burwell, is one of many lawsuits challenging a controversial IRS decision to extend federal subsidies to any person eligible to buy insurance on an ObamaCare exchange. The legal fight is over whether the text of ObamaCare permits subsidies to be given to citizens purchasing health insurance through Healthcare.gov, the federal exchange, when the law clearly says they cannot.

Supporters of ObamaCare say the disputed statutory language amounts to typos inconsistent with the spirit and purpose of the law. Opponents insist that the plain meaning of the words be honored, or risk the rule of law taking a back seat to bureaucratic whim.

The timing of the Supreme Court’s decision means that oral arguments will be held sometime in the spring with a final decision likely next summer. If the challengers are successful, King v. Burwell may go down in history as the lawsuit that signaled the beginning of the end of ObamaCare.

With its newest batch of regulations, the federal Department of Health and Human Services (HHS) essentially is telling non-profit religious employers that they can claim an exemption from ObamaCare’s contraception mandate, so long as they provide all the information necessary to violate the deeply held beliefs that justify the exemption.

As Lyle Denniston of SCOTUS Blog explains, the rules “also required the organization to tell the government what its health coverage plan for its employees was by name and type, and to provide contact information to the insurer operating the plan.

“The added information was designed to enable HHS to then take the initiative to arrange for the religious organization’s female employees to have contraceptive coverage at no cost, and with no cost to the organization itself.”

The controversial HHS rules came to light because of a legal challenge filed by a Catholic university in Florida. A federal judge blocked enforcement of the rules pending the outcome of the lawsuit.

A couple of observations immediately come to mind. First, there is no such thing as free contraception. If the insurance company must provide it “free” to some customers, it will then pass on the cost to others (e.g. higher premiums). Even the manpower at HHS spent on coordinating this run-around the First Amendment costs taxpayers money.

This brings up another point. How can it be that the federal agency charged with implementing ObamaCare has the resources and personnel available to investigate, negotiate and procure “free” contraception to the thousands (and more) employees working at exempt religious employers?

It’s not like there’s a public health crisis over lack of access to contraception. If HHS has so many extra people and dollars laying around, it should funnel them to real priorities like fighting Ebola, or perhaps, finishing ObamaCare’s main insurance portal before the second enrollment period begins in a matter of days.

Instead we get demands for information in order to make religious objectors participate in the very activity they cannot abide.

“Amy Lotven of the trade publication Inside Health Reform reports that before insurers agreed to sell coverage through the Patient Protection and Affordable Care Act’s health insurance Exchanges in 2015, they demanded that the federal Centers for Medicare and Medicaid Services explicitly agree to let them cancel policies if any of the Halbig cases succeed in blocking the subsidies that carriers had been receiving in the 36 states whose ObamaCare Exchanges were not, as [ObamaCare] requires before subsidies can flow, ‘established by the State’”, writes Michael Cannon.

You’ll recall that there is a big fight over whether the Obama administration is blatantly violating its own law by making subsidies available to people who don’t qualify under the statute. And, as Cannon points out, making illegal subsidies available also subjects up to 57 million individuals and employers to illegal penalties under ObamaCare’s individual and employer mandates.

That insurance companies demanded the right to cancel policies relying on subsidies shows how concerned the industry is at being blamed for high-cost coverage when and if the government’s policy is ruled illegal. That the Obama administration agreed indicates the strength of the argument that even the executive branch should follow the law.

The report’s publication follows on news that a federal district judge in Oklahoma ruled ObamaCare’s premium support (i.e. subsidies) mechanism is not available in states that use Healthcare.gov, the federal ObamaCare exchange. According to the text of the law, eligibility for subsidies depends on a citizen’s state operating its own exchange. If the law’s plain meaning is followed, RAND’s analysis will apply to citizens in more than half of the states.

The RAND Health report confirms a simple truth about ObamaCare – if people must pay the full freight of its “affordable” insurance, they will refuse.

Next year’s ObamaCare premiums won’t be available through Healthcare.gov – the federal insurance portal servicing 26 states – until the week after the November 4th midterm elections.

“Insurers say one big challenge for next year will involve millions of returning customers,” the AP reports. “It’s not really a technology issue, but a time crunch that also coincides with the Thanksgiving and Christmas holidays.”

In this case, it’s not the health insurance companies who are to blame, but rather the Obama administration. Late last year when Healthcare.gov was glitching its way into infamy, news leaked that the enrollment period for 2015 would be pushed back a month – from October 15 to November 15. Everybody who could read a political calendar knew the primary motivation was to hide the true cost of ObamaCare’s second year premiums from voters before going to the polls.

This is just one more reason why it’s a bad idea to have the government in control of health care pricing – those responsible will never allow the public to hold them accountable.

If you purchase an ObamaCare plan in California, good luck trying to find a directory that matches your insurance policy with a specific doctor.

“Altogether, the 10 insurers in Covered California have contracted with an estimated 75% of California’s licensed physicians, or nearly 90% of those considered active in the state,” reports the Los Angeles Times. “However, many of those doctors are available in just one or two health plans.”

That is, if you can find them.

“There’s no timetable for a state provider directory after the exchange scrapped an initial version that was riddled with errors. Instead, Covered California refers people to insurance company websites that vary in usefulness,” says the paper.

The resulting anger and confusion has spawned almost 300 complaints to state regulators and two consumer lawsuits against some of the biggest insurance companies in California.

Doctors are getting hosed too, according to the report. “Insurers say they can pass along savings by paying doctors less and rewarding that select group with higher patient volume. It’s also hoped those doctors will take on a bigger role coordinating patient care.”

To clarify, in return for getting paid less doctors that accept ObamaCare-compliant plans are getting more patients and more exposure to medical malpractice lawsuits.

No wonder there’s no directory matching providers to plans. The docs want to hide!